Novo Nordisk Stock Surges in 2025 as UBS Upgrades Ozempic Maker, Highlights Undervalued Opportunity

Essential Insights

• Shares of Novo Nordisk increased in both the Danish and U.S. markets after UBS analysts upgraded the stock to 'buy'.
• Despite the upgrade, UBS lowered the price target due to shares trading about 40% below their mid-2024 peak.
• Sales forecasts were adjusted downward, reflecting patent expirations and less promising trial outcomes for upcoming weight-loss medications post-2031.

Novo Nordisk (NVO) experienced a notable rise in its U.S. and domestic shares in 2024 after UBS Research analysts upgraded the Danish pharmaceutical giant's stock from 'neutral' to 'buy,' describing the recent sell-off as 'overdone.'

UBS revised the price target for Novo Nordisk’s Copenhagen-listed shares to 750 Danish kroner ($103.55), down from 1,100 kroner, as shares closed at 619.50 kroner—around 40% below the June 25, 2024 record close of 1,028 kroner.

Recent Decline Presents 'Attractive Entry Point'

UBS analysts highlighted that the stock’s recent dip offers an appealing entry point, anticipating growth in the weight-loss drug market starting in Q1 2024. Novo Nordisk leads this sector with its Ozempic and Wegovy products, competing closely with Eli Lilly’s Mounjaro and Zepbound.

Last month, Novo Nordisk shares dropped nearly 18% in a single day after disappointing results from a trial of its latest weight-loss drug. While the trial outcomes were 'undoubtedly disappointing,' UBS analysts noted the drug still shows promise as a more effective treatment than Ozempic and may demonstrate benefits in managing conditions like type 2 diabetes in future studies.

The adjusted price target reflects a 'risk-adjusted peak sales' estimate of $75 billion annually through 2031, down from the previous $80 billion forecast. This revision considers patent expirations in Europe (2031) and the U.S. (2032), which are expected to impact sales, along with the recent trial setbacks.

Novo Nordisk’s Copenhagen shares closed up approximately 2.8% on the upgrade day, while its U.S.-listed shares rose nearly 2%, reaching $84.94.

Stay updated with the latest on Novo Nordisk and the evolving pharmaceutical landscape for weight management solutions in 2024.

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